Q639
In normal costing, situation in which allocated amount of indirect cost is greater than incurred cost, is considered as
A.
incurred indirect cost
B.
over allocated indirect cost
AnswerC.
applied indirect cost
D.
applied direct cost
Answer: Option B
Solution
Answer: Option B
Solution:
In normal costing, situation in which allocated amount of indirect cost is greater than incurred cost, is considered as over allocated indirect cost. Indirect costs are usually grouped into common pools and charged to benefiting objectives through an allocation process/indirect cost rate.